What happened
Shares of residential swimming pools manufacturer Latham Group (SWIM -3.49%) were up 10.3% as of 2:40 p.m. ET Thursday, despite reporting a sizable earnings miss this morning.
Heading into the fourth quarter of 2021, analysts had forecast Latham Group would earn $0.06 per share on sales of $130.6 million. In fact, the company lost $0.05 per share ($0.04 per share, adjusted). On the bright side, though, sales came in ahead of estimates at $138.9 million.
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So what
Latham grew its quarterly sales by a record 24% year over year in the fourth quarter, wrapping up a 2021 that marked the company's 12th consecutive year of growth in net sales and adjusted EBITDA, management said.
That was actually a slowdown for Latham, however. For the full year fiscal 2021, sales at Latham grew 56% to $630.5 million. It lost money for the year: $0.56 per share.
Now what
Investors in Latham don't seem overly concerned about the losses, however, as long as Latham keeps the sales gains coming. In that regard, the fourth-quarter slowdown in sales might have been concerning but for the fact that management promised that sales will reaccelerate in 2022.
Issuing new guidance for the new year, Latham said it expects sales to range from $850 million to as high as $880 million. If correct, that would work out to as much as 40% year-over-year sales growth. It would also be well above the $735 million in sales that Wall Street is expecting. Additionally, management gave guidance for the first quarter, forecasting $170 million to $180 million in sales, versus the $162 million predicted by analysts.
Long story short: Latham is still losing money, but it beat on sales in the fourth quarter -- and seems likely to keep on beating on sales all through 2022, too.